Industrial Organization Paradigms, Empirical Evidence, and the Economic Case for Competition Policy

Chris Green

Canadian Journal of Economics, 1987, vol. 20, issue 3, 482-505

Abstract: The recent reform of competition policy in Canada prompts one to ask whether there remains a tenable economi c case for antitrust policy. To answer this question, this paper begi ns by sketching competing industrial organization (I-O) paradigms. Th e empirical evidence bearing on these paradigms, particularly the "m ainline" (structure-conduct-performance) paradigm which has provided the main theoretical support for competition policy, is examined. It is concluded that recent theoretical and empirical work in I-O have undermined the traditional economic case for competition policy. The last section of the paper attempts a partial reconstruction of the ca se for competition policy along somewhat unorthodox lines.

Date: 1987
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